Personalized Answers To Bankruptcy FAQs Are Best
- What is bankruptcy? It is a time-honored, legal procedure for eliminating burdensome debts. Bankruptcy is described in ancient scriptures as well as mentioned in the U.S. Constitution. Bankruptcy (Chapter 7) as we now know it allows debtors to petition a bankruptcy court for discharge (forgiveness) of debt by demonstrating their inability to repay, while assets are liquidated subject to the protection afforded by exemptions allowed under state law. In a Chapter 13 bankruptcy, debtors repay the creditors to protect assets and stop state court actions brought against debtors and their property.
- What are pros and cons of Chapter 7 bankruptcy versus Chapter 13 bankruptcy? Chapter 7 bankruptcy allows for consumer debts such as credit card bills and medical bills to be wiped out — eliminated — permanently. Debtors can begin to rebuild credit in a relatively short time frame. Chapter 13 bankruptcy is accomplished through a partial or total debt repayment plan over three to five years. It is suitable for people with income too high to qualify them for Chapter 7 bankruptcy, or for people with significant assets (such as large amounts of home equity).
- Should I consider debt consolidation instead of a form of either Chapter 7 or Chapter 13? Debt consolidation is an option, but you must be very careful because this option is quite often not effective. Additionally, some of these companies do not have your interests at heart. Debt consolidations rarely succeed in getting people out of debt. Rather, they generally tend to postpone the inevitable.
- What happens when a debtor files bankruptcy? Creditors are immediately prohibited from taking any collection actions, thanks to the automatic stay.
- Will I have to appear before a bankruptcy judge? Not likely. A debtor who has filed bankruptcy will be required to attend a 341 meeting of creditors. The 341 hearing is not a lengthy proceeding. All you are doing is truthfully answering questions as to your assets, liabilities and your financial situation.
- How long will it take to receive a discharge of debt following a bankruptcy filing? With a Chapter 7 bankruptcy, the discharge is likely to come about four or five months after filing. With a Chapter 13 bankruptcy, the discharge will come at the end of the three- to five-year repayment period.
- How will bankruptcy affect my credit? You may find that bankruptcy enables you to begin rebuilding credit faster than any other method of debt relief. It is true that the bankruptcy may appear on your credit report for up to 10 years. However, this does not prevent most people from getting credit after bankruptcy.
- How can I get personalized advice regarding bankruptcy and my debt situation? To schedule a free consultation with a Chicago lawyer at any of our convenient Greater Chicagoland area office locations, contact us toll free at 888-645-4357. You may also contact us by email.
Contact An Experienced Illinois Bankruptcy Attorney For Answers About Debt Relief
Keep in mind that answers to your questions are best when they are tailored to your unique circumstances. This is why we encourage you to contact us to schedule a free initial consultation. Information presented on this website is general in nature and does not constitute legal advice.